Key Facts
- •Go City Limited (formerly Leisure Pass Group Ltd) sells London Pass (LP) and London Explorer Pass (LEP), offering discounted access to London attractions and transport.
- •HMRC initially accepted the LP as a face-value voucher but later changed its view, leading to litigation.
- •The Voucher Directive (2016) aimed to clarify VAT treatment of vouchers, but excluded 'instruments functioning as tickets'.
- •Go City Limited restructured its arrangements from 3 January 2019, selling 'credits packages' instead of direct access.
- •HMRC issued four assessments totaling over £10 million, alleging underpayment of VAT.
- •Go City Limited appealed the assessments.
Legal Principles
An assessment under VATA s 73(1) requires it to 'appear to the Commissioners' that a VAT return is incorrect.
VATA s 73(1)
The definition of a 'voucher' under the Voucher Directive and VATA Sch 10B.
Voucher Directive, VATA Sch 10B
The economic and commercial reality of a transaction determines its VAT treatment.
Secret Hotels2, Airtours Holidays Transport Ltd, ING Intermediate Holdings Ltd
A supply of services requires a direct link between the service provided and the consideration received.
Apple & Pear Development Council v C & E Commrs
Where a consideration relates to multiple supplies, apportionment is determined by what is 'properly attributable' to each supply.
VATA s 19(4)
Services are supplied when performed.
VATA s 4
Post-Brexit, UK courts can consider EU case law for guidance but are not bound by decisions made after IP Completion Day.
European Union (Withdrawal) Act 2018, Gloucestershire Hospitals
Outcomes
The First and Second Assessments were set aside as invalid.
At the time of issuance, it did not appear to the Commissioners that Go City Limited's returns were incorrect.
The Third and Fourth Assessments and the Liability Decision were set aside.
The London Pass and London Explorer Pass were Multi-Purpose Vouchers (MPVs) outside the scope of VAT, and Go City Limited's method of apportioning consideration was correct.